Thursday, October 18, 2018

Loyalty Lesson Learned - Don't brush off reward programs

We welcome guest contributor, Matthew Couto - a Millennial traveller who left his desk job to travel the world. We learn a lesson from his travels and time off - using a rewards program credit card could have helped him save a lot more money by helping to pay off some of those travels. In this piece Matthew gives us his background and three credit cards he hand picked that he would have liked to have before his adventure started. 

I left for Australia almost two years ago after quitting my desk job. I had a one-year visa, financial freedom and no plan. I decided if I woke up one morning and wanted to be in Sydney, I would leave that day. I had it all figured out.

My second night in Melbourne, I met my girlfriend.

We fell in love over the next six months, and went long distance when I left for Europe. But there’s a catch: she is half Australian, half French. Her father’s family lives in Melbourne, her mother’s near Montpellier and her sister in Mexico City. She is a global woman and travels frequently to stay in touch with her family. Naturally, as her partner, I came along for the ride.

What I expected to be a year in Australia blossomed into a round-the-world adventure. Since November 2016, I’ve taken six intercontinental flights which meant I used my credit card much more than I expected.

I’ve realized too late what I could have been earning if I’d used a rewards points program. They were never on my radar, and now I’ve missed the opportunity to turn my expenses into a free flight - or more.

Looking back, I put nearly $25 000 on my credit card over 19 months. Here’s what I would have had today using one of these three travel credit cards.

1. Scotiabank More Rewards VISA

Great for the budget traveller, this card has no fee and only requires an annual income of $12 000. You get 4 points per dollar spent and 6 points per dollar at featured businesses like Overwaitea Foods, which are primarily in Western Canada. It’s best used to book flights, where it gives a 2.54% return with featured businesses. You also get 15 000 bonus points if you sign up before October 31, 2018.

Since I was spending outside of Canada, I would have received the normal return of 4 points per dollar, and earned 115 000 points (including the sign-up bonus). This amounts to approximately $500 to put towards flights booked through

Conclusion: Within the coming year I will certainly fly round-trip to Mexico City to visit my girlfriend’s sister, and if I had been using the Scotiabank More Rewards VISA, that flight would be free.

2. American Express Cobalt Card
With up to 30 000 bonus points in your first year if you spend at least $500 per month (not difficult while traveling), and a $10 monthly fee that saves you from a full-year commitment, this accessible card has a great return on a variety of products.

You get 5 points for every dollar with restaurants, bars, grocery stores and food delivery in Canada, 2 for eligible travel purchases and 1 for everything else.

I spent about $1000 on eating and drinking out while in Toronto for four months in the middle of my trip (5 points), $6000 on flights (2 points) and $18 000 on everything else (1 point). With the 30 000 point bonus, that’s 65 000 points with a value of more than $600 to put towards flights purchased through AMEX or shows with You can also redeem points towards purchases, hotel stays and car rentals.

Conclusion: I rented a car for a week in Queensland, Australia to go camping with my girlfriend. That rental could have been free. We’ve also discussed renting a hotel room when we need space from our crowded 2-bedroom apartment currently housing six people (it’s a long story). That solitude could have been free too.

3. Rogers Platinum Mastercard
Most rewards points programs give you a better return on eligible purchases made in Canada. However, for someone leaving Canada immediately and spending solely overseas, this card is a great option. With no annual fee, you get a 3% cashback return on purchases in foreign currencies - cancelling out the foreign exchange fee of 2.5% and earning a 0.5% cashback with the difference.

I spent around $20 000 in foreign currencies during my trip, which equals $600 of cashback rewards. Unlike points programs, you can use that money however you want.

Conclusion: My transactions were mostly in foreign currencies and the cashback rewards would have been significant.

A Life Lesson

I’ve always thought rewards programs weren’t worth the time and effort, but I’ve realized with the right program anyone can earn significant savings. These programs aren’t just for frequent flyers on business trips. I signed up for a new credit card anyways before I first left Canada, and if I had just done a little research, I could have saved with a travel credit card.

I missed out on the opportunity to have my next flight, hotel stay or car rental - you name it - for free. If you’ve been thinking about a trip of your own, I hope you have as wild of an adventure as I did. Just don’t make my mistake.

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